Telstra: job cuts won’t affect NBN

Telstra CEO David Thodey ... the telco will cut 1100 jobs from its Operations division, which is largely made up of field technicians, engineers, construction workers and IT staff.
Photo: Josh Robenstone

Telstra
has insisted a major round of job cuts focused on technicians working on its vast copper network will not jeopardise a future bid to win billions of dollars in construction contracts with
NBN Co
.

The telecommunications company announced on Wednesday it would cut 1100 Australian jobs from its Operation business unit by June 2014. The figure represents 6 per cent of the operations division which manage and maintain the mobile and fixed-line networks and continues Telstra’s ongoing push to outsource positions where possible.

Telstra chief operating officer
Brendon Riley
said the cuts came on the back of a major review into the division that was first flagged in May. “We need to continue to change the shape of Telstra and it’s probably going to get smaller every year," he said. “We’ve got to create the head room for growth and that means reconfiguring the shape of our workforce and its skills and capabilities.

“We’re reducing the back office to increase investment in our field ­services such as repairs, connections [and] we’re adding about 200 additional full time service technicians in our field team."

AFR
AFR

Mr Riley declined to break out how much the redundancies would cost the company although it is expected to be more than $100 million.

Telstra will continue to search for cuts, including from teams that did not have enough work due to advances in technology, until it hit the 1,100 redundancies.

Telstra Mr Riley also said it was too early to say if any future NBN contract could lead to the company hiring more workers.

Telstra is promoting its capabilities in building telecommunications networks as the Coalition prepares to switch technologies from running fibre cable directly into homes and businesses to a fibre to the node strategy.

“What we’re doing to the fixed technicians is more in the non-NBN traditional network side where we don’t have the volumes we once had," Mr Riley said.

But Communications Electrical and Plumbing Union spokesman John Ellery said the cuts were perplexing and would damage Telstra’s chances of winning billions of dollars in NBN contracts. “The industry is already struggling to get enough subcontractors to do the work and it’s struggling with the number of line faults," Mr Ellery said. “Noone else has the expertise to take on the job . . . but Telstra has made many, many thousands of people with these skills redundant [and] the Coalition’s NBN will need the copper.

“If you burn these people off the caravan and trip around Australia is pretty appealing."

Investors welcomed the cuts with Arnhem Investment Management partner Theo Maas saying the move was a step in the right direction.

“The cuts are probably not large enough but it’s a continuing direction for the company," he said. “This is just a step in a long journey."

Mr Maas said the cuts would most likely cost the company over $100 million in redundancy costs but added that Telstra’s balance sheet was strong enough to sustain the move. Telstra shares closed steady at $4.93.

Mr Maas added the move was part of a wider industry trend seen at other telecommunications carriers like SingTel-Optus and Vodafone.